Global Diesel Crunch Set to Last Well Into 2027
US Crude Oil Inventories Still in Freefall What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… While crude oil imports in Asia have reached pre-war levels, imports of refined products remain weak as gasoline and diesel imports from the Middle East have crashed amid reduced refining capacity.
Asia’s oil import story these days is a reflection of the global oil markets—crude oil availability has significantly increased since the early summer lows and flows out of the Middle East have largely recovered, but supply of gasoline, and especially diesel, has sharply dropped since the Iran war began at the end of February.
Reduced refinery runs in the Middle East, with some refineries still out following Iranian strikes in the early days of the war, have combined with lower refined product flows through the Strait of Hormuz, due to the much more dangerous ship-to-ship transfers of highly inflammable fuels, to slash supply to the market.
Russia’s fuel crunch due to Ukrainian strikes on refineries and the lack of Russian diesel exports have compounded the global diesel problem, sending refining margins and retail prices to record highs in the third quarter of the year.
The crunch is extending into the fourth quarter, and could last well into 2027, analysts say, as many refineries will have to undergo in the spring long overdue maintenance that has been deferred from this year to maximize production.
In this context, crude and product imports in Asia, the world’s biggest oil-importing region, are telling of the state of the global oil market.
Asia’s crude oil imports jumped to 26.39 million barrels per day (bpd) in October, up from 24.24 million bpd the month prior, per data by Kplercitedby Reuters’ Asia Commodities and Energy Columnist Clyde Russell.
The import levels are estimated at nearly par with the three-month average of 27 million bpd before the Iran war, and up by 39% compared to the lowest level during the conflict so far of 19 million bpd in April, according to the data.Related: IEA Warns Global Gas Crunch Could Last Well into 2027 Asia’s crude imports that have moved through the Strait of Hormuz soared to 7.4 million bpd in October, compared to just 1.6 million bpd in April.
Flows through Hormuz en route to Asia are still lagging the pre-war levels of about 13 million bpd, but supply has jumped from Saudi Arabia’s Red Sea port of Yanbu.
In recent months, Asian refiners have also materially raised crude oil imports from Russia and the Americas to offset the supply lost at the Strait of Hormuz.
In contrast, Asia’s light and middle distillate imports, estimated at about 6.15 million bpd in October by Kpler, were still 10% below pre-war levels.
Imports from the Middle East alone remain 18.4% below pre-war volumes, although Asia’s total fuel imports rose from September on the back of increased supply from the Americas and Africa..
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
Comments
Post a Comment